There has never been a time in the past 30 years when more organizations have set poverty reduction as a priority for their work.
There are grassroots groups, philanthropies, local government, Greater Memphis Chamber, and United Way of the Mid-South, all joined by their determination to reduce the concentrated poverty that traps 180,000 Memphians – roughly the population of Knoxville – in its grasp. In a region with the worst economic segregation in the U.S., with one out of two children living in poverty, and with poverty expanding from 42 to 78 census tracts between 1970 and 2010, there’s no argument that it’s time for the entire community to break the poverty that is a birthright for too many families.
Frequently, discussions about ways to reduce poverty default to favorite and important themes – creating more minority businesses and business receipts, improving blighted neighborhoods, and investing more in human services.
What is also needed are innovations that are complete departures from the norm and that fulfill Memphis’ potential to be a laboratory for new approaches on urban issues, but unfortunately, Memphis had just such an opportunity two years ago but squandered it.
That was when the Wharton Administration hired Scott Bernstein – president and co-founder of the Center for Neighborhood Technology (CNT) and one of the smartest thinkers on urban issues in the country – to help with the development of the Blueprint for Prosperity, a program to reduce the Memphis poverty rate by 10 points in 10 years.
As former Commercial Appeal reporter Wendi Thomas wrote in her series in July, 2014, on the anti-poverty plan, it “sidesteps the partisan morass by focusing on measures the city can do itself, using the built-in advantages of locally controlled entities such as the Memphis Light, Gas and Water Division, Memphis Housing Authority, and Memphis Area Transit Authority.”
Sadly, the CNT concepts were never executed, and their impact on Memphis was lost. In the end, CNT took the approach and ideas it developed for Memphis to 10 other cities with funding support from the John S. and James L. Knight Foundation.
For us, it represents one of the most painful examples of lost opportunity in Memphis in years.
Something New and Different
We thought of it again two weeks ago when CNT released its “Urban Opportunity Agenda,” and CityLab reported:
“Proportionally speaking, Americans living in poverty pay more for basic necessities. On energy bills, the poorest 20 percent of Americans spend more than seven times the share of their income than do the wealthiest. Dividing American incomes into three, households in the bottom third spend twice the portion of their incomes on transportation than the top third. High housing costs are hurting everyone—but they’re hurting poor Americans the most.
“The more you spend, the less you save, and the harder it is to climb up rungs on the economic ladder. Jobs and job-training programs are often heralded as the answer to poverty—but so long as the costs of living continue to rise faster than wages, better-paying work won’t break this vicious cycle alone. Poverty’s precipitous rise, it often seems, is intractable.
“It might not need to be. Urban poverty could be cut—rather drastically— through a basic principle of finance, according to the Center for Neighborhood Technology, a Chicago-based urban policy think-tank. On Thursday, the CNT released the ‘Urban Opportunity Agenda,’ with a central premise so simple that it’s sort of stunning it’s not talked about more: Reducing the cost of living for low-income citizens.
“According to the agenda, major U.S. cities could cut their poverty levels by 25 percent in large part by reducing household transportation costs, energy and water bills, and food expenditures. Focused job-creation is also necessary, and called for. But as the report makes clear, jobs alone can’t get to that magic number without measures aimed at keeping more cash in the pockets of the poor.”
What Could Have Been
Commentators said this is the first time there has ever been this kind of conversation about poverty, because there has never been a focus on reducing living expenses as a way to give poor families more money. Of course, the ultimate goal is to create jobs that offer employment and a ladder up to the middle class, but cost of living reductions are a transition step in that process.
Wendi Thomas wrote in her newspaper coverage: “To lift 10 percent of residents just above the poverty line means closing an income gap of $171 million, or $2,703 per person per year. The federal poverty level is $23,550 for a family of four. ‘Strictly speaking, if that family made an extra $5 a year, they’d be out of poverty, but you and I know that wouldn’t be true,’ Bernstein said.
“So the blueprint adds another $29 million for the financial cushion that protects fragile finances from unexpected expenses. To bridge an annual $200 million income gap, CNT designed eight strategies, four of which have a combined anti-poverty benefit of $203 million.
* Regional growth capture, $81 million: Grab the city’s share of regional employment growth by landing 2,600 new jobs; rework land use policies to steer jobs to higher-density locations closer to where employees live; and revamp city policy to encourage small-scale entrepreneurs
* Job access and placement, $73 million: Work with employers and the Chamber of Commerce to design with smarter mass transit, such as van pools; include ‘transportation commitments’ in employers’ incentive packages to locate jobs where better mass transit already exists, such as downtown; tailor workforce training so that low-income residents are ‘qualified and hired’ for 2,263 new better-paying jobs.
* Household expense reduction, $32 million: Teach families in poverty and those who are not how to use reduce energy, transportation, communication and food expenses, which make up 40 percent of a family’s budget.
* Resource efficiency, $17 million: Create a one-stop shop to retrofit residential, commercial and industrial buildings for energy and water efficiency, which would create 304 jobs; and reduce MLGW’s costs by 2 percent via renewable energy sources.
* The blueprint also calls for 188 zero-waste jobs, 76 jobs in green infrastructure and 250 child care jobs to support working single mothers, which is critical because 42 percent of Memphians who live in poverty live in female-headed households.
* The $2 million prosperity fund has the smallest anti-poverty benefit and adds no jobs, but it’s also the most creative. The fund would allow moderate and high income households to funnel a portion of their energy savings into a fund for microloans for budding entrepreneurs or even emergency child care vouchers.
Losing Our National Model
Memphis Mayor A C Wharton told Ms. Thomas the CNT’s concept for the Blueprint for Prosperity program had the potential to become a “national model.” In that, he was precisely right. Unfortunately, it became a national model without ever being implemented in the city where it was created.
The opportunity remains, and CNT underscores its importance for Memphis:
“More than any sports arena or business subsidy, poverty reduction itself has the potential to be an economic engine. Instead of high poverty rates and rising household costs being a drag on the local economy, efficiencies and targeted investment can boost economic growth.”
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